When examining the same pattern of high growth like the kind in Libya, Iraq, Somalia etc., it seems that countries will have to endure bombing by the Hegemonic forces to the dark ages like the Japs and German after WW2.

Most of the industrialized world economies need to shrink. We are already using up the planetary ecosystem way faster that it can be replenished, so we have to use less and share more. Low income countries and recent war zones need economic growth, so unless we find an extra planet or two the only way that pressure will be relieved is if the industrial economies plan their shrinkage so that it results in more justice.

The numbers make sense to me. I just looked up the data for the dutch and german statistics agencies and based on the current never-quite-enough euro policies, they predict a contraction of up to half a percentage point and possibly an increase in unemployment. Deficits are expected to go down but still not enough to be within the agreed upon margins, inviting even more budget cuts. Both the monetary and budgetary issues will thus contract the overall economy.

Let me tell you something. Things will only start to improve after Europe defaults. Default at once, and a new life to markets will follow. OF course, there will be months similar to 4Q08 and 1Q09, and government (US only) will have to help stalve markets. But after that, the wolrd will be half-resolved.

There will only be left China, who fools the whole world pretending to be competitive on the back of a devalued currency. Check ou France's situation during the depression. It had the same devalued franc over gold, and simply felt they were great while Britain and the rest of the world sank into depression. After the gold standar ended, they realized they accumulated 2 years of un-done reforms in its pipeline.

And Brazilian Government, enjoy the last quarters of high commodities prices, and get ready to get out of bad after 10 years of eating until you got 250Kg of fat. Diet will be hard, and markets won't be friendly when your bills start showing deficits due to lower taxes collection due to lower revenues from lower commodities prices. PT is so smart to achieve what other governments tried for years! Or isn't it ? Or is it enjoying the commodites ride...

But fear not 2012. fear 2013. Why ? cause in 2013 we don't have any elections. In 2012 we have in US, France and Germany. Do you think Merkozy and Obama will not do everything to avoid a deeped turmoil like the Lehman one ? They will. As for 2013, Obama will re-elect (Romney is Mormon for Christ sake - Not that I have anything against mormon, but people have big bias on religion), but Republicans will control house and senate, which means more abuse of our patiance when discussing budget.

China's economy won't grow until the U.S. consumers start spending money again. They are an export driven economy. They don't buy their own stuff at a rate consummate with the growth expectations they have. Basically if the U.S. doesn't buy their stuff, all of those little trinkets, bobbles, and gadgets that Americans go buy at Dollar General and Walmart, the Chinese don't have an economy. The same goes for India, Japan, and Europe. The whole world is dependent on Americans using credit cards to buy their crap. As far as Brazil goes, at least they buy their own products. That is how you keep an economy going. People buy stuff, and because people buy stuff, then other people have jobs selling and making the stuff that people buy. All economic growth is based on this premise. What matters more than anything for economic growth is how many different times a particular dollar changes hands. One of the problems with dollars and reals and yuan is that they circulate once, twice, or thrice, and then get locked up in bank vaults and treasury bonds. If the Chinese would take those dollars they collect or take those reals they collect and buy stuff from the U.S. or Brazil in return, something besides treasury bills or commodities, then the world economy might return back to normal again. As it stands now, the Chinese are cash hoarders, along with all of the banks who are hoarding cash. Deficits, trade or otherwise don't matter in the grand scheme. As far as commodities go, as a rule of thumb, if your countries economy is reliant on commodity exports so that it can subsidize its citizens standard of living then you don't really have a viable economy to begin with. The only places where commodity subsidization works any where in the world to any great extent is the Arabian Gulf states. Those are the only six countries in the world where the country can successfully subsidize its entire population based on commodity revenues. UAE, Kuwait, Saudi Arabia, in the whole wide world those are the only people who have successfully subsidized their economy based on subsidized exports or a commodity. Every other successful economy on Earth has to actually produced manufactured goods and have an export surplus to the United States in order to have a successful economy.

You should read a book called "Endgame" it explains some of these concepts brilliantly.

“No matter how the economy,China needs to plant more trees next years.”
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That’s “unnecessary roughness” on your part.

FYI, China, with some 2.05 million sq km of forest in 2007, is the only country with significant increase in forest area from 1990 to 2007--- A unprecedented 30.7% increase, among world’s top 5 countries in terms of forest areas (Russia, Brazil, Canada, USA, China, in that order), according to UN’s World Resources Institute data.

The respective rate of increase of forest area from 1990 to 2007 of top 5 is respectively:

guys, everything is cool, Ellas77 has solved the problem. any country with issues just need to buy a few ferraris and drive them around wherever american tourists hang out. and hide all the homeless people.

there, no more euro crisis. god why is it taking so long for everyone else to figure this out?

I am surprised to see Germany, Luxembourg and the Netherlands forecasted to shrink. Even with a Euro-crises, Germany exports a ton, Luxembourg is small and rich and in the middle of Western Europe, and the Netherlands is N. Europes entrepot and has banking and energy.

I recall the year end magazine making some mention with its predictins, but didn't feel sufficient content or evidence was provided to justifying a forecast of shrinkage for the above countries. Hopefully the Economist could elaborate further on its logic (they used to do a great roadshow actually, with great side decks on these forecasts in the past - I attended a couple).

Glad to see Libya and Iraq growing. Hopefully they use it to buy off some peace amongst political factions.

And glad to see Bhutan growing. PBS had an interesting documentary on the country the other weekend. One example: They have hydroelectric, but seems they divert water to undergrown facilities rather than damn up and contain whole rivers, so infrastructure is kept low key..